STAFF REPORTER
THE Balearic government is to launch an international campaign next month to explain to the Islands' principle tour operators why there is to be a new tax on car hire as of 2006. Travel agencies and the media in Germany and Great Britain are to be targets of the marketing offensive which will be spearheaded by Joan Flaquer, Balearic Tourism minister and his counterpart in Economy and Tax, Luis Ramis de Ayreflor. Their drive will aim to reassure the industry that the new measures are not detrimental to tourism, and to disassociate the levy from the old “Tourist Tax” introduced under the previous Socialist government in the Balearics to raise funds for conservation projects. The move comes as several sectors of the business world, as much outside the Balearics as within, have voiced opposition to the tax which has been planned to help fund the deficit on the National Health Service. Following a government meeting, Flaquer explained that the car hire industry has been chosen as a point of levy as it is a sector where the survival of small to medium-sized businesses is under threat. Flaquer claimed that there are a few specific companies whose businesses did not consist of hiring cars, but rather of importing and exporting them, taking advantage of fiscal benefits, offering them at lower prices, sometimes below that of the open market, resulting in unfair competition for the rest. The minister went on to say that this type of company opted out of paying Balearic traffic tax, and was in the habit of illegally using rural plots of land on which to station their fleets of vehicles. By means of their import and export practices, these companies can renew the cars every three or four months, something that can't be done by smaller, bona fide companies. Flaquer was confident that the key client markets would understand that the measures to be introduced will protect the small to medium-sized car hire businesses on the Islands.

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